Wednesday 05th October 2022: Asian markets gain on expectations of Fed rate hikes slowing

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Global Markets:

  • Asian Stock Markets : Nikkei up 0.48%, Hang Seng up 5.79%, ASX up 1.74%
  • Commodities : Gold at $1722.70 (-0.45%), Silver at $20.77 (-1.58%), Brent Oil at $91.50 (-0.33%), WTI Oil at $86.12 (-0.46%)
  • Rates : US 10-year yield at 3.707, UK 10-year yield at 4.034, Germany 10-year yield at 1.958

News & Data:

  • (NZD) Official Cash Rate 3.50% vs 3.50% expected
  • (USD) JOLTS Job Openings 10.05M vs 11.07M expected
  • (AUD) Cash Rate 2.60% vs 2.85% expected
  • Spanish service sector drops into contraction territory during September

Markets Update:

Asian shares advanced on Wednesday after U.S. stocks posted strong gains for a second consecutive session overnight on expectations that the U.S. Federal Reserve might ease off on major rate hikes, heading into 2023.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 2.3%, after U.S. stocks ended the previous session with gains. The index is up 1.4% so far this month. Australian markets rallied, with financials leading another day of broad gains after the Reserve Bank surprised markets by delivering a smaller than expected rate hike. Encouraging retail sales and service sector data also offered some support. Japanese shares eked out modest gains as investors awaited further signs of economic health from the United States, with ADP employment data, non-farm payroll print and ISM services data due this week.

Treasury yields cooled further on data showing a drop in job openings in the country. Investors are closely awaiting a crucial supply decision from OPEC+ due later Wednesday which could have global implications for already high energy prices and inflation. The dollar dropped slightly against the yen to 144.05..

 

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